Year: 2025
Type: article
Abstract: This study aims to analyze the relationship between earnings management and stock prices in Latin American companies. The sample includes 3,342 observations from six Latin American countries, covering the period from 2010 to 2021. The results show: (i) a positive relationship between earnings management and stock prices; (ii) a significant increase in both earnings management practices and stock prices during the pandemic; and (iii) a positive association between earnings management and stock prices (based on the Jones Model [1991]) during the pandemic period. These findings suggest that investors placed greater value on the stocks of companies engaging in higher levels of earnings management, which may indicate a higher risk tolerance or an inability to detect discretionary accounting practices. This study stands out from previous research by comparing this relationship before and after the pandemic.
Source: Cuadernos de Contabilidad
Authors: Geovane Camilo Santos, Marcelo Tavares
Institution: Universidade Federal Fluminense
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4413380810